The Beginning Of The End?
Each evening we focus
on the most interesting aspects for the upcoming trading
day. The comments are based on observations of the nightly
updates of the Stocks/Sectors and Market Bias pages. They
are provided for educational purposes only and are not
intended to be direct trading advice. Also, keep in mind
that these remarks are made up to 12 hours in advance of the
markets opening. Therefore, overnight events may alter the
outcome of these observations.
On
Wednesday, the Nasdaq gapped slightly lower (a) and began to rally in what
turned out to be a false reversal. It resumed its sell-off and came within 61
points of the prior lows (b) before attempting another rally. Then, late in the
day, the sellers came back in to push the index to just about where it opened.
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On a positive note, volume was the heaviest of the year and
the VIX spiked higher (a). This suggests that this may be the beginning of the
end as players are throwing in the towel and beginning to panic.Â
Even though we are beginning to see some signs
of panic, it’s way too early to start kissing each other just yet. I agree
with Jeff Cooper’s recent commentary: “a market must not make a new low for
at least three days before a meaningful bottom can form.”
Looking
to potential setups, McKesson HBOC
(
MCK |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, looks like it has the potential to rally out of a shallow
pullback.
Continuing on the pullback theme, Dura
Pharmaceuticals
(
DURA |
Quote |
Chart |
News |
PowerRating), mentioned Tuesday night and on the Momentum
10 Technology List, still looks poised to resume its strong uptrend out of a
shallow pullback.
Everest Reinsurance
(
RE |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, found support near the area of its last breakout. This
suggests its uptrend remains intact.
On the short side, Getty Images
(
GETY |
Quote |
Chart |
News |
PowerRating),
mentioned Tuesday night on the Pullbacks
Off Lows List, still looks poised to resume its strong downtrend.
Best
of luck with your trading on Thursday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!
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